Exhibit 10.4
MASTER PURCHASE AGREEMENT
THIS MASTER PURCHASE AGREEMENT is made as of this 30 day of June,
1997, by and among FRIO PORTFOLIO INVESTORS, L.L.C., a Delaware limited
liability company ("Frio"), RIO PORTFOLIO PARTNERS, L.P., a Delaware
limited partnership ("RIO"), BLACKROCK CAPITAL FINANCE, L.P., a Delaware
limited partnership ("BlackRock"), BRAZOS FUND, L.P., a Delaware limited
partnership ("Brazos") and MF SWAPCO, INC., a Delaware corporation ("MF")
(collectively, "Sellers"), MUNICIPAL MORTGAGE AND EQUITY, L.L.C., a
Delaware limited liability company ("MuniMae" or "Purchaser"), and MME I
CORPORATION, a Maryland corporation ("MME I").
WHEREAS, Frio, RIO, BlackRock and MF own all of the membership
interests (the "Membership Interests") in BlackCap, LLC, a Delaware limited
liability company ("BlackCap");
WHEREAS, BlackRock owns all of the bonds known as $10,300,000 Newport
News Redevelopment and Housing Authority 1995 Housing Revenue Refunding
Bonds (Indian Lakes Apartments Project) (the "Indian Lakes Bonds");
WHEREAS, pursuant to a certain Servicing Agreement and certain Special
Servicing Agreements (collectively, the "Servicing Agreements"), Brazos
acts as the Servicer and Special Servicer for the Indian Lakes Bonds and as
Special Servicer for certain bonds (the "Additional Bonds") issued with
respect to multifamily housing projects located in Independence, Missouri
and Locarno, Missouri and Columbia, Maryland (the Indian Lakes Bonds and
the Additional Bonds being collectively referred to herein as the "Bonds");
and
WHEREAS, Sellers desire to sell and MuniMae and MME I desire to
purchase all of the Sellers' right, title and interest in and to the
foregoing Membership Interests, Indian Lakes Bonds and the parties desire
to provide a mechanism for the transfer of the Servicing Agreements without
additional cost.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. SALE OF BLACKCAP.
(a) PURCHASE AND SALE. Frio, RIO, MF and BlackRock,
constituting all of the members of BlackCap, hereby agree to assign, sell
and convey to MuniMae and MME I all of their right, title and interest in
and to all of the Membership Interests in BlackCap. MuniMae and MME I
hereby agree to pay the sum of One Million Dollars ($1,000,000) for these
interests. The parties agree that MuniMae may deliver the purchase price
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to BlackRock and shall have no responsibility for the further distribution
thereof, it being BlackRock's responsibility to allocate and distribute the
money among the Sellers.
(b) ASSUMPTION OF BLACKROCK'S RESPONSIBILITIES. MuniMae hereby
agrees to assume, effective as of the closing date, all of BlackRock's
obligations under the FNMA Documents (as hereinafter defined). MuniMae and
BlackRock acknowledge that the approval of Federal National Mortgage
Association ("FNMA") is required for such assumption and they agree to
cooperate in obtaining such approval and to execute an Assignment,
Assumption and Consent substantially in the form of Exhibit A.
2. BLACKCAP SELLERS' REPRESENTATIONS AND WARRANTIES. Frio, RIO, MF
and BlackRock hereby jointly and severally represent and warrant the
following to MuniMae and MME I, each such representation and warranty to be
effective as of the date hereof and as of the date of closing:
(a) TITLE. Frio, RIO, MF and BlackRock own 100% of the
Membership Interests in BlackCap, LLC free and clear of all liens, claims
and encumbrances. Upon the conveyance of the Membership Interests to
MuniMae or its designee, MuniMae or its designee will own 100% of the
Membership Interests in BlackCap.
(b) LIABILITIES. BlackCap has no liabilities whatsoever except
for its contractual obligations to FNMA under the documents listed on
Exhibit B hereto (the "FNMA Documents"). There are no other agreements by
which BlackCap or any of its properties or assets is bound except for the
FNMA Documents listed on Exhibit A. True and correct copies of each of the
FNMA Documents have been delivered to MuniMae. No Event of Default and no
Potential Event of Default (each as defined in the FNMA Documents) exists
with respect to the FNMA Documents.
(c) ASSETS. BlackCap owns and will as of closing own each of
the assets listed on Schedule A free and clear of all liens, claims and
encumbrances except for such restrictions as may be imposed thereon by the
FNMA Documents.
3. SALE OF INDIAN LAKES BONDS. BlackRock and Brazos collectively
own, or have the right to, and hereby agree to, cause the sale of the
Indian Lakes Bonds to MuniMae, and MuniMae hereby agrees to buy the
$10,145,000 of outstanding Indian Lakes Bonds, for the sum of $10,297,783,
plus accrued interest to the date of purchase. If the Bonds are
certificated, BlackRock and Brazos agree to deliver the Bonds, with
appropriate fully executed instruments of transfer attached, to MuniMae or
its designee on the date of purchase. If the Bonds are uncertificated,
BlackRock and Brazos hereby agree to provide the Indian Lakes Bonds
registrar, any brokerage firm on whose records the Bonds are registered for
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the benefit of BlackRock or Brazos, and Depository Trust Corporation or its
nominee with irrevocable instructions to register the Bonds in the name of
MuniMae or its designee. The purchase price shall be paid in immediately
available funds on the date of closing.
4. REPRESENTATIONS AND WARRANTIES REGARDING INDIAN LAKES BONDS.
BlackRock hereby represents and warrants the following to MuniMae, each
such representation and warranty to be effective as of the date hereof and
as of the date of closing:
(a) TITLE. Merrill Lynch Portfolio Management, Inc. owns 100%
of the Indian Lakes Bonds, free and clear of all liens, claims and
encumbrances.
(b) TAX EXEMPTION. BlackRock is not aware of any claim by the
Internal Revenue Service, or of any facts which would support a claim by
the Internal Revenue Service, that interest on the Indian Lakes Bonds is
not excludable from gross income for purposes of federal income taxation.
5. TRANSFER OF SERVICING AGREEMENTS. Brazos agrees to amend the
Servicing and Special Servicing Agreements to permit Brazos to be
terminated at any time without cause as Servicer and Special Servicer under
the Indian Lakes Bonds and as Special Servicer under the Additional Bonds,
subject, however, to FNMA's approval in the case of the Additional Bonds.
Brazos agrees to use its best efforts to obtain FNMA's approval to a change
of Special Servicer for the Additional Bonds to MuniMae or its designee.
The appointment of MuniMae or its designee as Servicer and Special Servicer
under each Servicing Agreement shall be independent, such that if FNMA's
approval is obtained for some agreements but not others, those agreements
for which it is obtained (or is not needed) shall be transferred without
regard to the others.
6. CLOSING. Closing of the various purchases and transfers
described in this Agreement shall take place at a mutually agreeable time
and place, but not later than (a) June 16, 1997 as to the purchase
described in Section 1,(b) June 30, 1997, as to the purchase described in
Section 3, and (c) as set forth in Section 5 with respect to the transfers
described.
7. FURTHER ASSURANCES. Each party agrees to execute such other
documents and instruments as may be necessary to consummate each of the
transactions described in this Agreement. Each party agrees to cooperate
with each other party in obtaining any necessary approvals and each party
agrees to procure any necessary approvals diligently and in good faith.
8. EVALUATION OF MATERIALS. Sellers agree to provide Purchaser with
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any and all materials in Sellers' possession, or reasonably accessible to
Sellers, which Purchaser may desire in order to evaluate the various
purchases and transfers set forth in this Agreement. Without limiting the
generality of the foregoing, Sellers shall give Purchaser complete access
to Sellers' books and records regarding BlackCap, the Indian Lakes Bonds,
and each of the Additional Bonds. Sellers shall also give Purchaser access
to any of Sellers' books and records regarding Sellers' relationship with
FNMA as it relates to the purchases and transfers which are the subject of
this Agreement. By written notice to Sellers delivered no later than June
13, 1997, Purchaser may, as a result of its evaluation of Seller's
materials, terminate this Agreement as to any purchase or transfer not yet
closed.
9. COMPLETE AGREEMENT. This Agreement constitutes the complete
agreement of the parties hereto and may not be modified except in a writing
signed by the party against which such modification is sought to be
enforced. Each provision of this Agreement shall be deemed severable, so
that if any provision of this Agreement is held unenforceable, the
remainder shall be enforced so as to give effect to the intent of the
parties.
10. GOVERNING LAW. This Agreement shall be governed by the internal
laws of the State of Maryland (excluding reference to principles of
conflicts of law).
11. NOTICES. Any notice required or permitted to be given under this
Agreement shall be deemed received when delivered if sent by telecopy, by
recognized overnight courier, or by hand-delivery, or two days after
mailing, if sent by first-class mail, postage prepaid, return receipt
requested, to the following addresses, or to such other addresses as the
parties by notice delivered hereunder may designate:
If to Sellers: BlackRock Capital Finance L.P.
345 Park Avenue
30{th} Floor
New York, New York 10154
Attention: Mark Begeny
With a copy to: Hudson Advisors LLC
600 N. Pearl Street
Suite 1500
Dallas, Texas 75201
Attention: Jeffrey Yarckin
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If to Purchaser Municipal Mortgage and Equity,
or to MME I: L.L.C.
218 North Charles Street
Suite 500
Baltimore, Maryland 21201
Attention: Michael L. Falcone
With a copy to: Gallagher, Evelius & Jones
218 N. Charles Street
Suite 400
Baltimore, Maryland 21201
Attention: Stephen A. Goldberg,
Esq.
12. DECISION TO PURCHASE. Purchaser represents and warrants to
Seller (a) that Purchaser is a sophisticated investor with knowledge of and
experience in the areas of multi-family housing projects and the financing
of the same by means of both conventional and tax-exempt financing, (b)
that Purchaser has read and understands the FNMA Documents and, in
particular, that the Collateral Account (as defined in the FNMA Documents)
is available for all loss experienced with respect to the Mortgage Loans
delivered pursuant to the FNMA Documents, (c) that Purchaser has had or, at
the time it consummates the transactions contemplated hereby, will have
had, an opportunity to conduct such due diligence review and analysis of
BlackCap, the Membership Interests, the FNMA Documents, the Mortgage Loans
and the related information as the Purchaser deems appropriate, necessary
or desirable in order to make a complete, informed decision with respect to
the transactions contemplated hereby, (d) that the transactions
contemplated hereby involve a significant degree of risk and (e) that in
entering into this Agreement and consummating the transactions contemplated
hereby, the Purchaser has not relied upon any oral or written information
or any representations or warranties whatsoever from any Seller, or any of
their respective employees, affiliates, agents or representatives, other
than the representations and warranties of the Sellers expressly contained
herein.
13. NO USE OF BLACKROCK OR SIMILAR NAME. The Purchaser (a)
acknowledges that BlackRock will cause the name of BlackCap to be changed
to MMACAP, and (b) shall not use the name BlackRock, BlackCap or any
similar name as or in the name of any entity in which it has an interest
and which is a party to any of the FNMA Documents.
14. CONTINUING ACCURACY OF BLACKROCK REPRESENTATIONS. All of
BlackRock's representations and warranties to FNMA made in, or in
connection with, the FNMA Documents, were true and correct when made and
are now true and correct, except that as to all representations and
warranties made by BlackRock to FNMA under Section 4.2(h) of the Master
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Recourse Agreement described on Exhibit A (I.E., in connection with the
delivery of any Mortgage Loan (as defined in the FNMA Documents) to FNMA),
BlackRock represents only that such representations and warranties were
true when made. BlackRock shall defend, indemnify and hold MuniMae
harmless from any and all cost, loss, or expense (including reasonable
attorney's fees) claimed against or incurred by MuniMae arising in any way
out of the breach of BlackRock's representations and warranties in this
Agreement or in the FNMA Documents, including costs incurred in any seeking
the advice of counsel with respect to, or in enforcing, the provisions of
this paragraph. BlackRock shall have no liability, however, for any of its
representations or warranties which become inaccurate after the closing
date.
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IN WITNESS WHEREOF, and intending to be legally bound, the parties
have executed this Agreement as of the date and year first above written.
WITNESS: SELLERS:
FRIO PORTFOLIO INVESTORS, L.L.C.
By: Brazos Fund, L.P.,
Managing Member
By: Brazos Principal GenPar, L.P.,
its General Partner
By: Brazos GenPar, Inc.,
its General Partner
By: /S/ LOUIS PALETTA
Name: Louis Paletta
Title: Vice President
RIO PORTFOLIO PARTNERS, L.P.
By: Rio Plata, GenPar, Inc., its
General Partner
By: /S/ STEVEN LEE
Name: Steven Lee
Title: Vice President
BLACKROCK CAPITAL FINANCE, L.P.
By: BlackRock Asset
Investors, Its General Partner
By: /S/ RANDAL A. NARDONE
Name: Randal A. Nardone
Title: Managing Director
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BRAZOS FUND, L.P.
By: Brazos Principal GenPar, L.P.,
its General Partner
By: Brazos GenPar, Inc., its
General Partner
By: /S/ LOUIS PALETTA
Name: Louis Paletta
Title: Vice President
MF SWAPCO, INC.
By: /S/ RANDAL A. NARDONE
Name: Randal A. Nardone
Title: Secretary
PURCHASER:
MUNICIPAL MORTGAGE AND EQUITY,
L.L.C.
By: /S/ MICHAEL L. FALCONE
Name: Michael L. Falcone
Title: Executive Vice
President
MME I CORPORATION
By:
Name:
Title:
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SCHEDULE A
LIST OF BLACKCAP ASSETS
AGREEMENT AMOUNT
Custodian Agreement dated November 1, 1996
between Fannie Mae, BlackCap LLC, US Trust $1,329,551.24
MBS Lag Agreement between Fannie Mae and
Boatmens Trust (Locarno and Independence) $ 29,000.00
[The purchase amount for these accounts is
equal to $1,000,000.00] $1,358,551.24
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ASSIGNMENT, ASSUMPTION AND CONSENT AGREEMENT
This Assignment, Assumption and Consent Agreement ("Agreement") is made as
of this _____ day of June, 1997, between FEDERAL NATIONAL MORTGAGE ASSOCIATION
("Fannie Mae"), BLACKROCK CAPITAL FINANCE, L.P. ("Assignor") and MUNICIPAL
MORTGAGE AND EQUITY, L.L.C. ("Assignee").
RECITALS
A. Fannie Mae and Assignor, together with BlackCap LLC, are parties to
that certain Master Recourse Agreement (the "Master Recourse Agreement"), dated
as of November 1, 1996.
B. Assignor desires to assign all of its rights, interests and
obligations under the Master Recourse Agreement to Assignee, and Assignee
desires to assume all of Assignor's obligations under the Master Recourse
Agreement.
C. The Master Recourse Agreement affords Fannie Mae the right to consent
to the assignment of Assignor's rights, interest and obligations under the
Master Agreement, and Fannie Mae has agreed to consent to that assignment.
NOW, THEREFORE, Fannie Mae, Assignor and Assignee agree as follows:
Section 1. Representations and Warranties.
(a) Fannie Mae and Assignor each warrant and represent that (i)
attached hereto as Exhibit A is a true, accurate and complete copy of the
Master Recourse Agreement and (ii) the Master Recourse Agreement is in full
force and effect as of the date hereof and has not been amended or modified in
any respect nor has any notice of termination been given thereunder.
(b) Assignor represents and warrants that there is no Event of
Default or Potential Event of Default (as such terms are defined in the Master
Recourse Agreement) in existence on the date hereof.
(c) Fannie Mae represents and warrants that it has no knowledge of
any Event of Default (as defined above).
Section 2. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns to
Assignee all of its rights, interests and obligations under the Master Recourse
Agreement, and Assignee hereby assumes all of Assignor's rights, interests and
obligations (whether based on past or future events) under the Master Recourse
Agreement, including without limitation, Assignor's obligations with respect to
the representations and warranties in Section 4.2(i) of the Master Recourse
Agreement and the indemnification obligations related thereto in Section
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7.1(b)(ii) and (iv) of the Master Recourse Agreement; provided, however,
nothing herein shall be construed to limit Assignee's rights against Assignor
in the event of the breach of any representation or warranty by Assignor.
Concurrently with this Agreement, Assignee is acquiring all of the member
interests in BlackCap, LLC, the name of which is being changed to MMACap, LLC
and Assignee and Assignor agree to take all actions necessary to continue the
perfection of the security interest in any Collateral (as defined in the Master
Recourse Agreement) .
Section 3. CONSENT AND ACKNOWLEDGMENT. Fannie Mae consents to the
assignment and assumption set forth in Section 2 and acknowledges that Assignor
is relieved of all of its obligations under the Master Recourse Agreement.
Section 4. COUNTERPARTS. This Agreement may be executed in
counterparts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
WITNESS:
FEDERAL NATIONAL MORTGAGE ASSOCIATION
By: _____________________________
Name: _______________________
Title: ______________________
BLACKROCK CAPITAL FINANCE, L.P.
By: ____________________________
Name: ______________________
Title: _____________________
MUNICIPAL MORTGAGE AND EQUITY, L.L.C.
By: ______________________________
Name: ________________________
Title: _______________________
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EXHIBIT B
FNMA DOCUMENTS
1. Master Recourse Agreement by and among FNMA, BlackCap and BlackRock
dated as of November 1, 1996.
2. Custodial Agreement by and among FNMA, BlackCap and BlackRock dated
as of November 1, 1996.
3. Certificate of Authorized Representatives executed by BlackCap, and
dated November 20, 1996.
4. Letter of Acceptable Collateral executed by BlackCap dated November
20, 1996.
5. Assignment executed by BlackCap in favor of FNMA dated November 20,
1996.
6. Mortgage Loan Certificate by and among FNMA, BlackCap and BlackRock
dated November 27, 1996.
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